Iron ore price, page-31912

Some great discussion on iron prices, the value of FMG currently and also future based valuations.

I believe FMG is significantly undervalued at current iron prices and is value at iron prices at around $100 which is a long way off current prices.

The current share price excludes any potential upside to FFI investments. It's my understanding a couple of the projects are due or will be decided on over the next few months Including the ammonia plant in Tasmania, green ammonia in shipping and locomotives, hydrogen fuel cell power for drill rigs, battery technology for haul trucks, Christmas Creek hydrogen mobility project etc

Furthermore, the report/update on the Iron Bridge project is due in the next two weeks. Could be released any day now and I doubt it has been mentioned in a while. Hopefully it reconfirms the technical side of the project and reaffirms the deadline and budget.

Other consideration is the 400 million that is set aside for other resources like the Vulcan JV and the many exploration projects around the world.

After buying in many years ago at an average of $4-5, I took out a margin loan recently and bought more FMG when it was just under $20 and look forward to the dividend. Yes big risk but at the rate I'm on and the current div yield and value, I'm happy with the risk/return.

My only criticism of FMG is they could have been alot more aggressive in their pursuit to diversify. With the cashflow they have had over the last few years, I would rather have seen FMG takeover companies with great assets who just don't have the financing to develop significantly undervalued projects like HAV's Kalkaroo Copper project for peanuts and diversify into copper, gold etc Plenty of great projects who would love a JV which would diversify FMG and be cashflow accretive. Instead FMG has been exploring for years for gold, copper and other metals with very little success or promise (except the Vulcan JV but even that is super early and could be nothing). Would like to see some more info in reports about drilling results or updates.

Re iron ore prices - I don't believe supply will increase greatly over the next 3 years. Apart from MIN jumping from 20 to 90mtpa, no big increases elsewhere. I believe Vale will keep missing targets due to environmental/safety pressure and also COVID. Plus their management aren't idiots, better selling your full current production at $220 instead of increasing supply which could drop the price/sentiment of iron ore and cut profit. Think all iron ore producers learnt from the last time the prices were elevated and they flooded the markets.

Catalysts:
Continued strong Iron price

Positive report/update on Iron Bridge

Updates on any of the many FFI initiatives or new announcements regarding any deals on this front. Especially the Ammonia project in Tasmania that is due mid year from memory.
Non irons ore updates - Vulcan JV etc